Payment banks are created primarily to make having bank accounts easier. In November 2014 the proposal was first brought up and accounted for and on 19th August the Reserve bank of India (RBI) gave an in- principal approval to eleven of applicants which wanted to pursue this idea. Reliance industries, Vodafone and Airtel are some of the companies which bagged the opportunity. With payment bank, if we put in simple terms transaction of money becomes such simpler such as like using Paytm or m-Pesa. It would be like carrying an e-wallet for easy use by customers.
Customers can deposit a maximum of 1 lakh rupees in their payment bank. It might seem a very small amount for bank users but as this scheme aims for the easy creation of bank accounts for customers, this policy gels well. The payment bank can be used both as a savings account and current account. It would facilitate easy transfer of money from cities to small towns or villages. What it ultimately helps in doing is that even very small monetary transaction could be made with the help of this account without carrying money in our wallets which reduce many security issues.
This payment banks has the facility where customers can deposit money and interest would be given on it. This makes it even more lucrative. Further ATM cards and debit cards can be issued on it and the money deposited is allowed to be invested in government securities. However, it does not the issue of credit cards or does it accept NRI money which is conducive with its ultimate goal of creating account facilities that everyone will be comfortable using. The contract has been given to the above-mentioned phone companies primarily due to their wider reach even in the interiors of the country so that consumers will have accessibility to it. No doubt this piece of technology will make the monetary transaction easier.